Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 23, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TNDM | |
Entity Registrant Name | TANDEM DIABETES CARE INC | |
Entity Central Index Key | 1,438,133 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 10,118,659 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Current assets: | |||
Cash and cash equivalents | $ 12,079 | $ 44,678 | |
Restricted cash | 2,000 | ||
Short-term investments | 459 | 8,860 | |
Accounts receivable, net | 10,582 | 11,172 | |
Inventory, net | 29,985 | 21,195 | |
Prepaid and other current assets | 2,887 | 4,187 | |
Total current assets | 55,992 | 92,092 | |
Restricted cash—long-term | 10,000 | ||
Property and equipment, net | 20,286 | 18,409 | |
Other long-term assets | 160 | 107 | |
Total assets | 87,977 | 112,392 | |
Current liabilities: | |||
Accounts payable | 7,605 | 7,513 | |
Accrued expense | 2,536 | 1,629 | |
Employee-related liabilities | 11,413 | 10,183 | |
Deferred revenue | 2,295 | 5,208 | |
Other current liabilities | 5,562 | 6,943 | |
Total current liabilities | 29,411 | 31,476 | |
Notes payable—long-term | 75,596 | 78,960 | |
Deferred rent—long-term | 4,142 | 2,609 | |
Other long-term liabilities | 6,786 | 5,274 | |
Total liabilities | 115,935 | 118,319 | |
Commitments and contingencies | |||
Stockholders’ equity: | |||
Common stock, $0.001 par value; 100,000 shares authorized as of September 30, 2017 and December 31, 2016, 5,487 and 3,110 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively.(1) | [1] | 55 | 31 |
Additional paid-in capital | 438,194 | 398,623 | |
Accumulated other comprehensive loss | (1) | ||
Accumulated deficit | (466,207) | (404,580) | |
Total stockholders’ deficit | (27,958) | (5,927) | |
Total liabilities and stockholders’ deficit | 87,977 | 112,392 | |
Patents [Member] | |||
Current assets: | |||
Patents, net | $ 1,539 | $ 1,784 | |
[1] | The issued and outstanding shares of common stock have been restated for all periods presented to reflect the effects of the 1-for-10 reverse stock split, which was effective on October 9, 2017 as described in Note 7. |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) | 9 Months Ended | |
Sep. 30, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares | |
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 5,487,000 | 3,110,000 |
Common stock, shares outstanding | 5,487,000 | 3,110,000 |
Reverse stock split description | 1-for-10 reverse stock split |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Income Statement [Abstract] | |||||
Sales | $ 27,003 | $ 12,293 | $ 67,306 | $ 55,336 | |
Cost of sales | 15,131 | 13,870 | 40,680 | 41,809 | |
Gross profit (loss) | 11,872 | (1,577) | 26,626 | 13,527 | |
Operating expenses: | |||||
Selling, general and administrative | 20,125 | 20,683 | 65,077 | 63,768 | |
Research and development | 4,914 | 6,154 | 14,910 | 14,464 | |
Total operating expenses | 25,039 | 26,837 | 79,987 | 78,232 | |
Operating loss | (13,167) | (28,414) | (53,361) | (64,705) | |
Other income (expense), net: | |||||
Interest and other income | 60 | 34 | 179 | 258 | |
Interest and other expense | (2,928) | (1,434) | (8,445) | (4,177) | |
Total other expense, net | (2,868) | (1,400) | (8,266) | (3,919) | |
Net loss | (16,035) | (29,814) | (61,627) | (68,624) | |
Other comprehensive loss: | |||||
Unrealized gain (loss) on short-term investments | (6) | 1 | (23) | ||
Comprehensive loss | $ (16,035) | $ (29,820) | $ (61,626) | $ (68,647) | |
Net loss per share, basic and diluted | [1] | $ (3.09) | $ (9.73) | $ (13.79) | $ (22.52) |
Weighted average shares used to compute basic and diluted net loss per share | [1] | 5,190 | 3,063 | 4,468 | 3,047 |
[1] | The issued and outstanding shares of common stock have been restated for all periods presented to reflect the effects of the 1-for-10 reverse stock split, which was effective on October 9, 2017 as described in Note 7. |
CONDENSED STATEMENTS OF OPERAT5
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (Parenthetical) | Oct. 09, 2017 | Sep. 30, 2017 |
Reverse stock split description | 1-for-10 reverse stock split | |
Subsequent Event [Member] | ||
Reverse stock split description | 1-for-10 reverse stock split | |
Reverse stock split, conversion ratio | 0.1 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | ||
Net loss | $ (61,627) | $ (68,624) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 4,737 | 4,017 |
Interest expense related to amortization of debt discount and debt issuance costs | 1,338 | 194 |
Provision for allowance for doubtful accounts | 664 | 666 |
Provision for inventory reserve | 316 | 1,805 |
Payment in kind interest accrual of notes payable | 1,236 | 675 |
Amortization of discount on short-term investments | (16) | (59) |
Stock-based compensation expense | 10,502 | 8,733 |
Other | 69 | (37) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (73) | 5,191 |
Inventory, net | (9,038) | (7,110) |
Prepaid and other current assets | 1,133 | (1,408) |
Other long-term assets | (53) | (8) |
Accounts payable | 522 | 291 |
Accrued expense | 907 | (144) |
Employee-related liabilities | 797 | (1,225) |
Deferred revenue | (4,137) | 8,528 |
Other current liabilities | (601) | 1,348 |
Deferred rent | (425) | (566) |
Other long-term liabilities | (746) | 142 |
Net cash used in operating activities | (54,495) | (47,591) |
Investing activities | ||
Purchase of short-term investments | (25,890) | |
Proceeds from sales and maturities of short-term investments | 8,500 | 37,950 |
Purchase of property and equipment | (4,299) | (6,187) |
Net cash provided by investing activities | 4,201 | 5,873 |
Financing activities | ||
Issuance of notes payable, net of issuance costs | 14,994 | |
Restricted cash in connection with notes payable | (8,000) | |
Proceeds from public offering, net of offering costs | 25,125 | |
Proceeds from issuance of common stock | 570 | 1,592 |
Net cash provided by financing activities | 17,695 | 16,586 |
Net decrease in cash and cash equivalents | (32,599) | (25,132) |
Cash and cash equivalents at beginning of period | 44,678 | 43,088 |
Cash and cash equivalents at end of period | 12,079 | 17,956 |
Supplemental disclosures of cash flow information | ||
Interest paid | 5,871 | 3,205 |
Supplemental schedule of noncash investing and financing activities | ||
Lease incentive - lessor-paid tenant improvements | 3,037 | |
Debt discount included in other long-term liabilities | 4,116 | 454 |
Common stock warrants issued in connection with term loan | 3,331 | |
Property and equipment included in accounts payable | $ 72 | $ 802 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation The Company Tandem Diabetes Care, Inc. is a medical device company focused on the design, development and commercialization of products for people with insulin-dependent diabetes. The Company is incorporated in the state of Delaware. Unless the context requires otherwise, the terms the “Company” or “Tandem” refer to Tandem Diabetes Care, Inc. The Company manufactures and sells insulin pump products in the United States that are designed to address large and differentiated needs of the insulin-dependent diabetes market. The Company’s pump products currently include: • the t:slim X2 Insulin Delivery System, or t:slim X2, the next-generation flagship product that is updatable and designed to display Dexcom G5 continuous glucose monitoring, or CGM, sensor information directly on the pump Home Screen; and • the t:flex Insulin Delivery System, or t:flex, for people with greater insulin needs. The Company began commercial sales of its first product, t:slim, in August 2012. During 2015, the Company commenced commercial sales of two additional insulin pumps: t:flex in May 2015 and t:slim G4 in September 2015. In October 2016, the Company commenced commercial sales of t:slim X2 and discontinued new sales of t:slim. In August 2017, the Company commenced commercial sales of t:slim X2 with Dexcom G5 Mobile CGM integration, or t:slim X2 with G5, and discontinued new sales of t:slim G4. The Company will continue to provide ongoing service and support to existing t:slim and t:slim G4 customers. In July 2016, the Company received clearance from the U.S. Food and Drug Administration (“FDA”) to begin offering the Tandem Device Updater, a Mac In July 2016, the Company also announced and launched a Technology Upgrade Program that provided eligible t:slim and t:slim G4 customers a path to obtain t:slim X2, or, as of August 2017, t:slim X2 with G5. Participating customers had the right to exchange their original t:slim and t:slim G4 for a t:slim X2 or t:slim X2 with G5, under a variable pricing structure. The Technology In September 2017, the Company commenced commercial sales of products using the t:lock TM Effective December 31, 2016, the Company adopted FASB Accounting Standard Codification (“ASC”) Topic 205-40, Presentation of Financial Statements – Going Concern, which requires management to evaluate whether there are relevant conditions and events that, in the aggregate, raise substantial doubt about the entity’s ability to continue as a going concern and to meet its obligations as they become due within one year after the date the financial statements are issued. The financial statements included in this Quarterly Report on form 10-Q for the three and nine months ended September 30, 2017 (the “Quarterly Report”) have been prepared on a basis that assumes the Company will continue as a going concern, and do not include any adjustments that may result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of the Company’s liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company has incurred operating losses since its inception and, as reflected in the accompanying financial statements, the Company has an accumulated deficit of $466.2 million as of September 30, 2017, which reflects a net loss of $61.6 million for the nine months ended September 30, 2017. The Company had cash and cash equivalents and short-term investments of $22.5 million at September 30, 2017, including $10.0 million of restricted cash as required by the Company’s term loan agreement (as amended , the “Term Loan Agreement”) with Capital Royalty Partners II, L.P. and its affiliate funds (“Capital Royalty Partners”). On October 9, 2017, the Company effected a 1-for-10 reverse stock split of its issued and outstanding shares of common stock. The par value per share and the authorized number of shares of common stock and preferred stock were not adjusted as a result of the reverse stock split. All common stock share and per-share amounts for all periods presented in these condensed financial statements have been adjusted to reflect the reverse stock split. The number of authorized shares of common stock remains at 100 million shares. The Company completed a registered public offering on October 17, 2017, or the October Financing, which resulted in gross proceeds to the Company of $16.2 million, before deducting underwriting discounts and commissions and other offering expenses (see Note 9 “Subsequent Events”). As part of the October Financing, the Company issued 4,630,000 shares of common stock, Series A warrants to purchase 4,630,000 shares of common stock and Series B warrants to purchase 4,630,000 shares of common stock, at a public offering price of $3.50 per share and accompanying warrants. The Series A warrants have an exercise price of $3.50 per share, are immediately exercisable, and will expire on the (see Note 6, “Term Loan Agreement”) The Company believes it will be necessary to raise additional funding. The Company intends to seek additional capital from public or private offerings of its capital stock or it may elect to borrow additional amounts under new debt financing arrangements or from other sources. If the Company issues equity or convertible debt securities to raise additional funding, its existing stockholders may experience dilution, it may incur significant financing costs, and the new equity or convertible debt securities may have rights, preferences and privileges senior to those of its existing stockholders. The Company’s ability to continue as a going concern, meet its minimum liquidity requirements, satisfy the covenants under the Term Loan Agreement, and execute its business strategy is dependent on its ability to raise significant additional capital, of which there can be no assurance. If the Company cannot generate sufficient revenues from the sale of its products or secure additional financing on acceptable terms, it may be forced to significantly alter its business strategy, substantially curtail or modify its current operations, or cease operations altogether. Basis of Presentation The Company has prepared the accompanying unaudited condensed financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments which are of a normal and recurring nature, considered necessary for a fair presentation of the financial information contained herein, have been included. Interim financial results are not necessarily indicative of results anticipated for the full year or any other period(s). These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (“Annual Report”), from which the balance sheet information herein was derived. These unaudited condensed financial statements exclude disclosures required by U.S. GAAP for complete financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies There have been no significant changes in our significant accounting policies during the nine months ended September 30, 2017, as compared with those disclosed in the Annual Report. Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make informed estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying footnotes as of the date of the financial statements. Actual results could materially differ from those estimates and assumptions. Restricted Cash The Company recorded $10.0 million and $2.0 million of restricted cash as of September 30, 2017 and December 31, 2016, respectively, for the minimum cash balance requirement in connection with the Term Loan Agreement (see Note 6, “Term Loan Agreement”). Accounts Receivable The Company grants credit to various customers in the normal course of business. The Company maintains an allowance for doubtful accounts for potential credit losses. Provisions are made based on historical experience, assessment of specific risk, specific review of outstanding invoices, and various additional assumptions and estimates that are believed to be reasonable under the circumstances. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and employee-related liabilities are reasonable estimates of their fair values because of the short-term nature of these assets and liabilities. Short-term investments are carried at fair value. Based on the borrowing rates currently available for loans with similar terms, the Company believes that the fair value of its long-term notes payable approximates its carrying value. Certain trade-in rights offered by the Company pursuant to the Technology Upgrade Program to certain eligible customers, have been determined to be guarantees under applicable accounting guidance. The Company recorded a liability for the estimated fair value of the guarantees at their inception. The Program expired on September 30, 2017, at which time the remaining guarantee liabilities of $1.1 were recognized as sales. For further details regarding these guarantees, see the information included under the heading “Revenue Recognition” within this Note 2, as well as the information in Note 5, “Fair Value Measurements.” Revenue Recognition Revenue is generated primarily from sales in the United States of insulin pumps, disposable cartridges and infusion sets to individual customers and third-party distributors that resell the product to insulin-dependent diabetes customers. The Company is paid directly by customers who use the products, distributors and third-party insurance payors. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title passed, the price is fixed or determinable, and collectability is reasonably assured. Trade-In Rights The Company launched a Technology Upgrade Program in 2016, which expired September 30, 2017. The trade-in rights associated with the Program were accounted for as guarantees or rights to return based on specific factors and circumstances, including the period of time the trade-in rights were exercisable, the likelihood that the trade-in rights would be exercised, and the amount of the specified-price trade-in value. The Company determined that trade-in rights for t:slim G4 Pump customers were generally guarantees. The Company accounted for the guarantees under applicable accounting standards, which require a guarantor to recognize, at the inception of the guarantees, a liability for the estimated fair value of the obligation undertaken in issuing the guarantees. Subsequently, the initial liability recognized for the guarantees was reduced as the Company was released from the risk under the guarantees, which was when the trade-in right was exercised or the right expired. The guarantees were accounted for as an element of a multiple element arrangement. The estimated fair value of the guarantees was based on various economic and customer behavioral assumptions, including the probability that a trade-in right would be exercised, the specified trade-in amount, the expected fair value of the used t:slim G4 Pump at trade-in and the expected sales price of a t:slim X2 Pump. Upon expiration of the Program at September 30, 2017, the remaining guarantee liabilities of $1.1 were recognized as sales compared to $1.2 million recorded as guarantee liabilities in other current liabilities on the accompanying balance sheets, as of September 30, 2017 and December 31, 2016, respectively. The Company determined that t:slim Pump trade-in rights were in-substance rights to return products. Such rights to return were accounted for pursuant to the right of return accounting guidance. As the Company did not have sufficient history to reasonably estimate returns associated with trade-in rights, all eligible t:slim Pump sales between July 2016 and October 2016, which is when the Company discontinued new shipments of t:slim, Revenue Recognition for Arrangements with Multiple Deliverables The Company considers the deliverables in its product offering as separate units of accounting and recognizes deliverables as revenue upon delivery only if (i) the deliverable has standalone value and (ii) the arrangement includes a general right of return relative to the delivered item(s) and delivery or performance of the undelivered item(s) is probable and substantially controlled by the Company. The Company allocates consideration to the separate units of accounting, unless the undelivered elements were deemed perfunctory and inconsequential. The amount of the determined guarantee fair value is allocated in full to the guarantee and the remaining allocable consideration is allocated to other separate units of accounting using the relative selling price method, in which allocation of consideration is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence (“TPE”), or if VSOE and TPE are not available, management’s best estimate of a standalone selling price (“ESP”) for the undelivered elements. The Company offers a cloud-based data management application, t:connect, which is made available to customers upon purchase of any of its insulin pumps. In July 2016, the Company received clearance from the FDA to begin offering the Tandem Device Updater, a Mac four-year period, which is the hosting period for t:connect and the period that software upgrades are expected to be provided. At September 30, 2017 and December 31, 2016, $1.8 million and $1.6 million, respectively, were recorded as deferred revenue for these undelivered elements. All other undelivered elements at the time of sale are deemed inconsequential or perfunctory. Product Returns The Company offers a 30-day right of return to its customers from the date of shipment of any of its insulin pumps, provided a physician’s confirmation of the medical reason for the return is received. Estimated allowances for sales returns are based on historical returned quantities as compared to pump shipments in those same periods of return. The return rate is then applied to the sales of the current period to establish a reserve at the end of the period. The return rates used in the reserve are adjusted for known or expected changes in the marketplace when appropriate. The allowance for product returns is recorded as a reduction of revenue and accounts receivable in the period in which the related sale is recorded. The amount recorded on the Company’s balance sheets for product return allowance was Warranty Reserve The Company generally provides a four-year warranty on its insulin pumps to end user customers and may replace any pumps that do not function in accordance with the product specifications. Insulin pumps returned to the Company may be refurbished and redeployed. The Company evaluates the reserve quarterly and makes adjustments when appropriate. Changes to the actual replacement rates or the expected product replacement cost could have a material impact on the Company’s warranty reserve. At September 30, 2017 and December 31, 2016, the warranty reserve was $4.8 million and $5.7 million, respectively. The following table provides a reconciliation of the change in product warranty liabilities from December 31, 2016 through September 30, 2017 (in thousands): Balance at December 31, 2016 $ 5,690 Provision for warranties issued during the period 4,110 Settlements made during the period (5,240 ) Increases in warranty estimates 190 Balance at September 30, 2017 $ 4,750 Current portion $ 2,080 Non-current portion 2,670 Total $ 4,750 Stock-Based Compensation Stock-based compensation cost is measured at the grant date based on the estimated fair value of the award, and the portion that is ultimately expected to vest is recognized as compensation expense over the requisite service period on a straight-line basis. The Company estimates the fair value of stock options issued under the Company’s 2013 Stock Incentive Plan (“2013 Plan”) and shares issued under the Company’s 2013 Employee Stock Purchase Plan (“ESPP”) using a Black-Scholes option-pricing model on the date of grant. The Black-Scholes option-pricing model requires the use of subjective assumptions about a number of key variables, including stock price volatility, expected term, and risk-free interest rate. For awards that vest based on the achievement of service conditions, the Company recognizes expense using the straight-line method less estimated forfeitures based on historical experience. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares that were outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the sum of the weighted average number of common shares that were outstanding for the period and the weighted-average number of dilutive common share equivalents outstanding for the period determined using the treasury stock method. Dilutive common share equivalents are comprised of warrants, options outstanding under the Company’s equity incentive plans, and shares subject to issuance pursuant to the ESPP. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. Potentially dilutive securities not included in the calculation of diluted net loss per share (because inclusion would be anti-dilutive) are as follows (in thousands, in common stock equivalent shares): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Common stock warrants - 99 - 99 Common stock options 8 293 3 262 ESPP - 13 - 7 8 405 3 368 Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance that clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance is effective for public companies for fiscal years beginning after December 15, 2017, and interim periods within those years. The Company does not believe the adoption of the standard will have a material impact on the Company’s statement of cash flow. In June 2016, FASB issued a new credit loss standard that changes the impairment model for most financial assets and certain other instruments. for annual periods beginning after December 15, 2018, and interim periods within those years In March 2016, FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) (“ASU 2016-09”), which is intended to simplify several areas of accounting for share-based payment arrangements. The amendments in this update cover such areas as the recognition In February 2016, FASB issued final guidance for lease accounting. The new guidance requires lessees to put most leases on their balance sheet but to recognize expenses on their income statement in a manner similar to current accounting principles. The new guidance also eliminates the current real estate-specific provisions for all entities. The standard is effective for public companies for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company is in the process of assessing the impact of the adoption of the standard on its financial statements. In May 2014, FASB and the International Accounting Standards Board issued a comprehensive new revenue recognition standard (“Revenue from Contracts with Customers Standard”) that will supersede existing revenue guidance under U.S. GAAP and International Financial Reporting Standards. The Revenue from Contracts with Customers Standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. The Revenue from Contracts with Customers Standard will be effective for the Company beginning in its first quarter of 2018, and early adoption is permitted. Subsequently, FASB issued the following standards related to Revenue from Contracts with Customers Standard: Principal versus Agent Considerations; Identifying Performance Obligations and Licensing; and Narrow-Scope Improvements and Practical Expedients (collectively, the “new revenue standards”). The new revenue standards may be applied retrospectively to each prior period presented (full retrospective method) or retrospectively with the cumulative effect recognized as of the date of adoption (the modified retrospective method). The Company currently expects to adopt the new revenue standards in the first quarter of 2018 utilizing the modified retrospective method. The Company currently believes that the adoption will not have a material impact on the recognition of revenues for the sale of its products through third-party distributors and insurance payors with whom it has contractual arrangements, which generally comprise approximately 99% of its sales. Additionally, the Company has given consideration to the accounting for warranty and commissions and does not anticipate a material change to its current method of expense recognition. As of September 30, 2017, the Company has not determined the full impact the adoption of the new revenue standard may have on its reported revenue or results of operations. |
Short-Term Investments
Short-Term Investments | 9 Months Ended |
Sep. 30, 2017 | |
Investments Debt And Equity Securities [Abstract] | |
Short-Term Investments | 3. Short-Term Investments The Company invests in investment securities, principally debt instruments of financial institutions and corporations with strong credit ratings. The following represents a summary of the estimated fair value of short-term investments at September 30, 2017 and December 31, 2016 (in thousands): At September 30, 2017 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 416 $ 43 $ — $ 459 Total $ 416 $ 43 $ — $ 459 At December 31, 2016 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Available-for-sale investment securities: Commercial paper Less than 1 $ 8,483 $ 1 $ (2 ) $ 8,482 Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 354 $ 26 $ (2 ) $ 378 Total $ 8,837 $ 27 $ (4 ) $ 8,860 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | 4. Inventory Inventory consisted of the following at September 30, 2017 and December 31, 2016 (in thousands): September 30, December 31, 2017 2016 Raw materials $ 10,138 $ 9,375 Work in process 5,497 4,395 Finished goods 14,350 7,425 Total $ 29,985 $ 21,195 The increase in inventory at September 30, 2017 as compared to December 31, 2016 is primarily due to an increase in infusion set finished goods in connection with the commercial launch of the t:lock infusion set. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements Authoritative guidance on fair value measurements defines fair value, establishes a consistent framework for measuring fair value, and expands disclosures for each major asset and liability category measured at fair value on either a recurring or a nonrecurring basis. Fair value is intended to reflect an assumed exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities . Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly for substantially the full term of the asset or liability . Level 3: Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities, which require the reporting entity to develop its own valuation techniques that require input assumptions . The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands): Fair Value Measurements at September 30, 2017 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (1) $ 16,527 $ 16,527 $ — $ — Mutual funds held for nonqualified deferred compensation plan participants (2) 459 459 — — Total assets $ 16,986 $ 16,986 $ — $ — Liabilities Deferred compensation (2) $ 459 $ 459 $ — $ — Total liabilities $ 459 $ 459 $ — $ — Fair Value Measurements at December 31, 2016 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (1) $ 39,941 $ 39,941 $ — $ — Commercial paper 8,482 — 8,482 — Mutual funds held for nonqualified deferred compensation plan participants (2) 378 378 — — Total assets $ 48,801 $ 40,319 $ 8,482 $ — Liabilities Deferred compensation (2) $ 378 $ 378 $ — $ — Total liabilities $ 378 $ 378 $ — $ — (1) Generally, cash equivalents include money market funds and investments with a maturity of three months or less from the date of purchase. This asset is included as a component of cash and cash equivalents on the balance sheet, of which $10.0 million is classified as restricted cash – long-term at September 30, 2017. (2) The deferred compensation plan is directed by the Company and structured as a Rabbi Trust for the benefit of certain executives and non-employee directors. The investment assets of the Rabbi Trust are valued using quoted market prices multiplied by the number of shares held in each trust account. The related deferred compensation liability represents the fair value of the investment assets . The Company’s Level 2 financial instruments are valued using market prices on less active markets with observable valuation inputs such as interest rates and yield curves. The Company obtains the fair value of Level 2 financial instruments from quoted market prices, calculated prices or quotes from third-party pricing services. The Company validates these prices through independent valuation testing and review of portfolio valuations provided by the Company’s investment managers. There were no transfers between Level 1 and Level 2 assets during the nine months ended September 30, 2017. The Company recorded $1.2 million as guarantee liabilities in other current liabilities on the accompanying condensed balance sheet at December 31, 2016. There were no guarantee liabilities at September 30, 2017. Guarantees were recorded as a reduction of revenue in the statement of operations and other comprehensive loss. Guarantees are not measured at fair value on a recurring basis, and therefore are not included in the tables above. Guarantees are classified within Level 3 of the fair value hierarchy. The estimated fair value of the guarantees is based on various economic and customer behavioral assumptions, including the probability that a trade-in right will be exercised, the specified trade-in amount, the expected fair value of the used t:slim G4 Pump at trade-in and the expected sales price of t:slim X2 (see Note 2, “Summary of Significant Accounting Policies – Revenue Recognition”). Changes in the probability that a trade-in right will be exercised have the most significant impact on the estimate of the fair value of the liabilities. In connection with the Term Loan Agreement, on March 7, 2017, the Company issued ten-year warrants to purchase 193,788 shares of the Company’s common stock at an exercise price of $23.50 per share (the “Capital Royalty Warrant”). The Company used the Black-Scholes option-pricing model to calculate the value of the Capital Royalty Warrant of . The Capital Royalty Warrant was recorded as debt discount and stockholders’ equity, as the warrants met the definition of an equity instrument. The Black-Scholes option-pricing model requires the use of subjective assumptions about a number of key variables, including stock price volatility, expected term, and risk-free interest rate. |
Term Loan Agreement
Term Loan Agreement | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Term Loan Agreement | 6. Term Loan Agreement The Company had $82.3 million and $81.1 million of aggregate borrowings outstanding under the Term Loan Agreement, at September 30, 2017 and December 31, 2016, respectively. Under the Term Loan Agreement, interest is payable at the Company’s option, (i) in cash at a rate of 11.5% per annum, or (ii) at a rate of 9.5% of the 11.5% per annum in cash and 2.0% of the 11.5% per annum (the “PIK Loan”) to be added to the principal of the loan and subject to accruing interest. Interest-only payments are due quarterly on March 31, June 30, September 30 and December 31 of each year of the interest-only payment period, which ends on December 31, 2019. The principal balance is due in full at the end of the term of the loan, which is March 31, 2020 (the “Maturity Date”). The Company had elected to pay interest in cash at a rate of 11.5% per annum through September 30, 2015. Beginning October 1, 2015, the Company elected to pay interest in cash at a rate of 9.5% per annum and for a rate of 2.0% per annum to be added to the principal of the loan. As a result, $2.3 million was added to the principal of the loan since October 1, 2015, which the Company refers to as PIK Loans. The term loan is collateralized by all assets of the Company. The principal financial covenants require that the Company attain minimum annual revenues of $80.0 million in 2017 and $95.0 million each year thereafter until the Maturity Date. Pursuant to Amendment No. 3 to The audit report of the Company’s independent registered public accounting firm contained in the Annual Report included an explanatory paragraph that describes conditions that raise substantial doubt about the Company’s ability to continue as a going concern. This explanatory paragraph constituted a potential event of default under the Term Loan Agreement. On March 7, 2017, the Company entered into Waiver and Amendment No. 4 to the Term Loan Agreement (the “Fourth Amendment”), which included a limited waiver of the potential event of default that could have resulted from the explanatory paragraph. In consideration for the waiver, the Company agreed to: (i) issue the Capital Royalty Warrant, (ii) increase its restricted cash balance from $2.0 million to $10.0 million, (iii) provide Capital Royalty Partners the same information it makes available to its board of directors, subject to limited exceptions, and (iv) not incur additional third party indebtedness secured solely by accounts receivable, inventory and cash. In addition, the Fourth Amendment includes a covenant requiring the Company to complete financings in which its gross proceeds from the sale of equity securities is at least $30.0 million, no later than January 15, 2018. Furthermore, the Company agreed to increase the Back End Financing Fee to 5.0% of the entire aggregate principal amount of borrowings outstanding, including total PIK Loans issued. The Back End Financing Fee is payable at maturity of the Company’s loans and on the principal amount of any loans for which it makes an optional prepayment, and may be payable in connection with certain asset sales or a change of control. As of September 30, 2017 and December 31, 2016, respectively, the Company had accrued $4.1 million and $1.5 million for the Back End Financing Fee in other long-term liabilities and as contra-debt in notes payable-long-term on the accompanying condensed balance sheets. The Company evaluated execution of the Fourth Amendment as a modification for accounting purposes and concluded that it did not constitute a modification because the present value of the future cash flows under the Fourth Amendment |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity Public Offering In the first quarter of 2017, the Company completed a public offering of 1,850,000 shares of its common stock at a public offering price of $12.50 per share. The gross proceeds to the Company from the offering were $23.1 million, before deducting underwriting discounts and commissions and other offering expenses payable by the Company. At The Market (ATM) Program In July 2017, the Company entered into an Equity Distribution Agreement implementing an ATM program for aggregate gross proceeds up to $15.0 million. During the three The gross proceeds to the Company from these sales were $4.3 million, before deducting underwriting discounts and commissions and other offering expenses payable by the Company Shares Reserved for Future Issuance The following shares of the Company’s common stock were reserved for future issuance at September 30, 2017 (in thousands): Shares underlying outstanding warrants 293 Shares underlying outstanding stock options 933 Shares authorized for future equity award grants 39 Shares authorized for issuance as ESPP awards — 1,265 The Company issued 24,408 shares of its common stock upon the exercise of stock options during the nine months ended September 30, 2017, and issued 14,897 shares of its common stock upon the exercise of stock options during the year ended December 31, 2016. The ESPP enables eligible employees to purchase shares of the Company’s common stock using their after tax payroll deductions, subject to certain conditions. The ESPP consists of a two-year offering period with four six-month purchase periods which begin in May and November of each year. There were 69,502 The Company announced the suspension of the ESPP as of May 16, 2017 due to a lack of available shares. The suspension was accounted for as a cancellation of an award with no consideration. The previously unrecognized compensation cost as of the suspension date of $2.4 million was fully expensed during the second quarter of 2017. Stock-Based Compensation The assumptions used in the Black-Scholes option-pricing model are as follows: Stock Option Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Weighted average grant date fair value (per share) $ 3.00 $ 35.00 $ 5.10 $ 37.80 Risk-free interest rate 2.0 % 1.3 % 1.9 % 1.4 % Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 % Expected volatility 60.3 % 56.1 % 60.0 % 55.5 % Expected term (in years) 6.1 6.1 6.1 6.1 ESPP Nine Months Ended September 30, 2017 (1) 2016 Weighted average grant date fair value (per share) N/A $ 26.90 Risk-free interest rate N/A 0.6 % Expected dividend yield N/A 0.0 % Expected volatility N/A 56.9 % Expected term (in years) N/A 1.3 (1) There were no grants made pursuant to the ESPP during the three and nine months ended September 30, 2017. The following table summarizes the allocation of stock-based compensation expense (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Cost of sales $ 264 $ 267 $ 1,022 $ 776 Selling, general & administrative 1,961 2,320 8,423 6,992 Research and development 167 318 1,057 965 Total $ 2,392 $ 2,905 $ 10,502 $ 8,733 The total stock-based compensation expense capitalized as part of the cost of inventory was $0.3 million and $0.2 million at September 30, 2017 and December 31, 2016, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies From time to time, the Company may be subject to legal proceedings, regulatory encounters or other matters arising in the ordinary course of business, including actions with respect to intellectual property, employment, product liability, and contractual matters. In connection with these matters, the Company assesses, on a regular basis, the probability and range of possible loss based on the developments in these matters. A liability is recorded in the financial statements if it is determined that it is probable that a loss has been incurred, and that the amount or range of the loss can be reasonably estimated. Because of the uncertainties related to the occurrence, amount, and range of loss on any pending actions, the Company is currently unable to predict their ultimate outcome, and, with respect to any pending litigation or claim where no liability has been accrued, to make a meaningful estimate of the reasonably possible loss or range of loss that could result from an unfavorable outcome. At September 30, 2017 and December 31, 2016, there were no legal proceedings, regulatory encounters or other matters for which the negative outcome was considered probable or for which the amount or range of loss was estimable. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | 9. Subsequent Event On October 9, 2017, the Company effected a 1-for-10 reverse stock split of its issued and outstanding shares of common stock. The par value per share and the authorized number of shares of common stock and preferred stock were not adjusted as a result of the reverse stock split. All common stock share and per-share amounts for all periods presented in these condensed financial statements have been adjusted to reflect the reverse stock split. The number of authorized shares of common stock remains at 100 million shares. On October 17, 2017, the Company completed a registered public offering of 4,630,000 shares of its common stock, Series A warrants to purchase up to 4,630,000 shares of its common stock and Series B warrants to purchase up to 4,630,000 shares of its common stock, at a public offering price of $3.50 per share and accompanying warrants. The gross proceeds to the Company from the offering were approximately $16.2 million, before deducting underwriting discounts and commissions and other offering expenses payable by the Company. The Series A warrants have an exercise price of $3.50 per share, are immediately exercisable, and will expire on the 5-year anniversary of the date of issuance. The Series B warrants have an exercise price of $3.50 per share, are immediately exercisable, and will expire on the 6-month anniversary of the date of issuance. |
Organization and Basis of Pre16
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
The Company | The Company Tandem Diabetes Care, Inc. is a medical device company focused on the design, development and commercialization of products for people with insulin-dependent diabetes. The Company is incorporated in the state of Delaware. Unless the context requires otherwise, the terms the “Company” or “Tandem” refer to Tandem Diabetes Care, Inc. The Company manufactures and sells insulin pump products in the United States that are designed to address large and differentiated needs of the insulin-dependent diabetes market. The Company’s pump products currently include: • the t:slim X2 Insulin Delivery System, or t:slim X2, the next-generation flagship product that is updatable and designed to display Dexcom G5 continuous glucose monitoring, or CGM, sensor information directly on the pump Home Screen; and • the t:flex Insulin Delivery System, or t:flex, for people with greater insulin needs. The Company began commercial sales of its first product, t:slim, in August 2012. During 2015, the Company commenced commercial sales of two additional insulin pumps: t:flex in May 2015 and t:slim G4 in September 2015. In October 2016, the Company commenced commercial sales of t:slim X2 and discontinued new sales of t:slim. In August 2017, the Company commenced commercial sales of t:slim X2 with Dexcom G5 Mobile CGM integration, or t:slim X2 with G5, and discontinued new sales of t:slim G4. The Company will continue to provide ongoing service and support to existing t:slim and t:slim G4 customers. In July 2016, the Company received clearance from the U.S. Food and Drug Administration (“FDA”) to begin offering the Tandem Device Updater, a Mac In July 2016, the Company also announced and launched a Technology Upgrade Program that provided eligible t:slim and t:slim G4 customers a path to obtain t:slim X2, or, as of August 2017, t:slim X2 with G5. Participating customers had the right to exchange their original t:slim and t:slim G4 for a t:slim X2 or t:slim X2 with G5, under a variable pricing structure. The Technology In September 2017, the Company commenced commercial sales of products using the t:lock TM Effective December 31, 2016, the Company adopted FASB Accounting Standard Codification (“ASC”) Topic 205-40, Presentation of Financial Statements – Going Concern, which requires management to evaluate whether there are relevant conditions and events that, in the aggregate, raise substantial doubt about the entity’s ability to continue as a going concern and to meet its obligations as they become due within one year after the date the financial statements are issued. The financial statements included in this Quarterly Report on form 10-Q for the three and nine months ended September 30, 2017 (the “Quarterly Report”) have been prepared on a basis that assumes the Company will continue as a going concern, and do not include any adjustments that may result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of the Company’s liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company has incurred operating losses since its inception and, as reflected in the accompanying financial statements, the Company has an accumulated deficit of $466.2 million as of September 30, 2017, which reflects a net loss of $61.6 million for the nine months ended September 30, 2017. The Company had cash and cash equivalents and short-term investments of $22.5 million at September 30, 2017, including $10.0 million of restricted cash as required by the Company’s term loan agreement (as amended , the “Term Loan Agreement”) with Capital Royalty Partners II, L.P. and its affiliate funds (“Capital Royalty Partners”). On October 9, 2017, the Company effected a 1-for-10 reverse stock split of its issued and outstanding shares of common stock. The par value per share and the authorized number of shares of common stock and preferred stock were not adjusted as a result of the reverse stock split. All common stock share and per-share amounts for all periods presented in these condensed financial statements have been adjusted to reflect the reverse stock split. The number of authorized shares of common stock remains at 100 million shares. The Company completed a registered public offering on October 17, 2017, or the October Financing, which resulted in gross proceeds to the Company of $16.2 million, before deducting underwriting discounts and commissions and other offering expenses (see Note 9 “Subsequent Events”). As part of the October Financing, the Company issued 4,630,000 shares of common stock, Series A warrants to purchase 4,630,000 shares of common stock and Series B warrants to purchase 4,630,000 shares of common stock, at a public offering price of $3.50 per share and accompanying warrants. The Series A warrants have an exercise price of $3.50 per share, are immediately exercisable, and will expire on the (see Note 6, “Term Loan Agreement”) The Company believes it will be necessary to raise additional funding. The Company intends to seek additional capital from public or private offerings of its capital stock or it may elect to borrow additional amounts under new debt financing arrangements or from other sources. If the Company issues equity or convertible debt securities to raise additional funding, its existing stockholders may experience dilution, it may incur significant financing costs, and the new equity or convertible debt securities may have rights, preferences and privileges senior to those of its existing stockholders. The Company’s ability to continue as a going concern, meet its minimum liquidity requirements, satisfy the covenants under the Term Loan Agreement, and execute its business strategy is dependent on its ability to raise significant additional capital, of which there can be no assurance. If the Company cannot generate sufficient revenues from the sale of its products or secure additional financing on acceptable terms, it may be forced to significantly alter its business strategy, substantially curtail or modify its current operations, or cease operations altogether. |
Basis of Presentation | Basis of Presentation The Company has prepared the accompanying unaudited condensed financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments which are of a normal and recurring nature, considered necessary for a fair presentation of the financial information contained herein, have been included. Interim financial results are not necessarily indicative of results anticipated for the full year or any other period(s). These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (“Annual Report”), from which the balance sheet information herein was derived. These unaudited condensed financial statements exclude disclosures required by U.S. GAAP for complete financial statements. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make informed estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying footnotes as of the date of the financial statements. Actual results could materially differ from those estimates and assumptions. |
Restricted Cash | Restricted Cash The Company recorded $10.0 million and $2.0 million of restricted cash as of September 30, 2017 and December 31, 2016, respectively, for the minimum cash balance requirement in connection with the Term Loan Agreement (see Note 6, “Term Loan Agreement”). |
Accounts Receivable | Accounts Receivable The Company grants credit to various customers in the normal course of business. The Company maintains an allowance for doubtful accounts for potential credit losses. Provisions are made based on historical experience, assessment of specific risk, specific review of outstanding invoices, and various additional assumptions and estimates that are believed to be reasonable under the circumstances. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and employee-related liabilities are reasonable estimates of their fair values because of the short-term nature of these assets and liabilities. Short-term investments are carried at fair value. Based on the borrowing rates currently available for loans with similar terms, the Company believes that the fair value of its long-term notes payable approximates its carrying value. Certain trade-in rights offered by the Company pursuant to the Technology Upgrade Program to certain eligible customers, have been determined to be guarantees under applicable accounting guidance. The Company recorded a liability for the estimated fair value of the guarantees at their inception. The Program expired on September 30, 2017, at which time the remaining guarantee liabilities of $1.1 were recognized as sales. For further details regarding these guarantees, see the information included under the heading “Revenue Recognition” within this Note 2, as well as the information in Note 5, “Fair Value Measurements.” |
Revenue Recognition | Revenue Recognition Revenue is generated primarily from sales in the United States of insulin pumps, disposable cartridges and infusion sets to individual customers and third-party distributors that resell the product to insulin-dependent diabetes customers. The Company is paid directly by customers who use the products, distributors and third-party insurance payors. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title passed, the price is fixed or determinable, and collectability is reasonably assured. Trade-In Rights The Company launched a Technology Upgrade Program in 2016, which expired September 30, 2017. The trade-in rights associated with the Program were accounted for as guarantees or rights to return based on specific factors and circumstances, including the period of time the trade-in rights were exercisable, the likelihood that the trade-in rights would be exercised, and the amount of the specified-price trade-in value. The Company determined that trade-in rights for t:slim G4 Pump customers were generally guarantees. The Company accounted for the guarantees under applicable accounting standards, which require a guarantor to recognize, at the inception of the guarantees, a liability for the estimated fair value of the obligation undertaken in issuing the guarantees. Subsequently, the initial liability recognized for the guarantees was reduced as the Company was released from the risk under the guarantees, which was when the trade-in right was exercised or the right expired. The guarantees were accounted for as an element of a multiple element arrangement. The estimated fair value of the guarantees was based on various economic and customer behavioral assumptions, including the probability that a trade-in right would be exercised, the specified trade-in amount, the expected fair value of the used t:slim G4 Pump at trade-in and the expected sales price of a t:slim X2 Pump. Upon expiration of the Program at September 30, 2017, the remaining guarantee liabilities of $1.1 were recognized as sales compared to $1.2 million recorded as guarantee liabilities in other current liabilities on the accompanying balance sheets, as of September 30, 2017 and December 31, 2016, respectively. The Company determined that t:slim Pump trade-in rights were in-substance rights to return products. Such rights to return were accounted for pursuant to the right of return accounting guidance. As the Company did not have sufficient history to reasonably estimate returns associated with trade-in rights, all eligible t:slim Pump sales between July 2016 and October 2016, which is when the Company discontinued new shipments of t:slim, Revenue Recognition for Arrangements with Multiple Deliverables The Company considers the deliverables in its product offering as separate units of accounting and recognizes deliverables as revenue upon delivery only if (i) the deliverable has standalone value and (ii) the arrangement includes a general right of return relative to the delivered item(s) and delivery or performance of the undelivered item(s) is probable and substantially controlled by the Company. The Company allocates consideration to the separate units of accounting, unless the undelivered elements were deemed perfunctory and inconsequential. The amount of the determined guarantee fair value is allocated in full to the guarantee and the remaining allocable consideration is allocated to other separate units of accounting using the relative selling price method, in which allocation of consideration is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence (“TPE”), or if VSOE and TPE are not available, management’s best estimate of a standalone selling price (“ESP”) for the undelivered elements. The Company offers a cloud-based data management application, t:connect, which is made available to customers upon purchase of any of its insulin pumps. In July 2016, the Company received clearance from the FDA to begin offering the Tandem Device Updater, a Mac four-year period, which is the hosting period for t:connect and the period that software upgrades are expected to be provided. At September 30, 2017 and December 31, 2016, $1.8 million and $1.6 million, respectively, were recorded as deferred revenue for these undelivered elements. All other undelivered elements at the time of sale are deemed inconsequential or perfunctory. Product Returns The Company offers a 30-day right of return to its customers from the date of shipment of any of its insulin pumps, provided a physician’s confirmation of the medical reason for the return is received. Estimated allowances for sales returns are based on historical returned quantities as compared to pump shipments in those same periods of return. The return rate is then applied to the sales of the current period to establish a reserve at the end of the period. The return rates used in the reserve are adjusted for known or expected changes in the marketplace when appropriate. The allowance for product returns is recorded as a reduction of revenue and accounts receivable in the period in which the related sale is recorded. The amount recorded on the Company’s balance sheets for product return allowance was |
Warranty Reserve | Warranty Reserve The Company generally provides a four-year warranty on its insulin pumps to end user customers and may replace any pumps that do not function in accordance with the product specifications. Insulin pumps returned to the Company may be refurbished and redeployed. The Company evaluates the reserve quarterly and makes adjustments when appropriate. Changes to the actual replacement rates or the expected product replacement cost could have a material impact on the Company’s warranty reserve. At September 30, 2017 and December 31, 2016, the warranty reserve was $4.8 million and $5.7 million, respectively. The following table provides a reconciliation of the change in product warranty liabilities from December 31, 2016 through September 30, 2017 (in thousands): Balance at December 31, 2016 $ 5,690 Provision for warranties issued during the period 4,110 Settlements made during the period (5,240 ) Increases in warranty estimates 190 Balance at September 30, 2017 $ 4,750 Current portion $ 2,080 Non-current portion 2,670 Total $ 4,750 |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation cost is measured at the grant date based on the estimated fair value of the award, and the portion that is ultimately expected to vest is recognized as compensation expense over the requisite service period on a straight-line basis. The Company estimates the fair value of stock options issued under the Company’s 2013 Stock Incentive Plan (“2013 Plan”) and shares issued under the Company’s 2013 Employee Stock Purchase Plan (“ESPP”) using a Black-Scholes option-pricing model on the date of grant. The Black-Scholes option-pricing model requires the use of subjective assumptions about a number of key variables, including stock price volatility, expected term, and risk-free interest rate. For awards that vest based on the achievement of service conditions, the Company recognizes expense using the straight-line method less estimated forfeitures based on historical experience. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares that were outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the sum of the weighted average number of common shares that were outstanding for the period and the weighted-average number of dilutive common share equivalents outstanding for the period determined using the treasury stock method. Dilutive common share equivalents are comprised of warrants, options outstanding under the Company’s equity incentive plans, and shares subject to issuance pursuant to the ESPP. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. Potentially dilutive securities not included in the calculation of diluted net loss per share (because inclusion would be anti-dilutive) are as follows (in thousands, in common stock equivalent shares): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Common stock warrants - 99 - 99 Common stock options 8 293 3 262 ESPP - 13 - 7 8 405 3 368 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance that clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance is effective for public companies for fiscal years beginning after December 15, 2017, and interim periods within those years. The Company does not believe the adoption of the standard will have a material impact on the Company’s statement of cash flow. In June 2016, FASB issued a new credit loss standard that changes the impairment model for most financial assets and certain other instruments. for annual periods beginning after December 15, 2018, and interim periods within those years In March 2016, FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) (“ASU 2016-09”), which is intended to simplify several areas of accounting for share-based payment arrangements. The amendments in this update cover such areas as the recognition In February 2016, FASB issued final guidance for lease accounting. The new guidance requires lessees to put most leases on their balance sheet but to recognize expenses on their income statement in a manner similar to current accounting principles. The new guidance also eliminates the current real estate-specific provisions for all entities. The standard is effective for public companies for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company is in the process of assessing the impact of the adoption of the standard on its financial statements. In May 2014, FASB and the International Accounting Standards Board issued a comprehensive new revenue recognition standard (“Revenue from Contracts with Customers Standard”) that will supersede existing revenue guidance under U.S. GAAP and International Financial Reporting Standards. The Revenue from Contracts with Customers Standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. The Revenue from Contracts with Customers Standard will be effective for the Company beginning in its first quarter of 2018, and early adoption is permitted. Subsequently, FASB issued the following standards related to Revenue from Contracts with Customers Standard: Principal versus Agent Considerations; Identifying Performance Obligations and Licensing; and Narrow-Scope Improvements and Practical Expedients (collectively, the “new revenue standards”). The new revenue standards may be applied retrospectively to each prior period presented (full retrospective method) or retrospectively with the cumulative effect recognized as of the date of adoption (the modified retrospective method). The Company currently expects to adopt the new revenue standards in the first quarter of 2018 utilizing the modified retrospective method. The Company currently believes that the adoption will not have a material impact on the recognition of revenues for the sale of its products through third-party distributors and insurance payors with whom it has contractual arrangements, which generally comprise approximately 99% of its sales. Additionally, the Company has given consideration to the accounting for warranty and commissions and does not anticipate a material change to its current method of expense recognition. As of September 30, 2017, the Company has not determined the full impact the adoption of the new revenue standard may have on its reported revenue or results of operations. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Reconciliation of Change in Product Warranty Liabilities | The following table provides a reconciliation of the change in product warranty liabilities from December 31, 2016 through September 30, 2017 (in thousands): Balance at December 31, 2016 $ 5,690 Provision for warranties issued during the period 4,110 Settlements made during the period (5,240 ) Increases in warranty estimates 190 Balance at September 30, 2017 $ 4,750 Current portion $ 2,080 Non-current portion 2,670 Total $ 4,750 |
Schedule of Anti-Dilutive Securities | Potentially dilutive securities not included in the calculation of diluted net loss per share (because inclusion would be anti-dilutive) are as follows (in thousands, in common stock equivalent shares): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Common stock warrants - 99 - 99 Common stock options 8 293 3 262 ESPP - 13 - 7 8 405 3 368 |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Estimated Fair Value of Short-Term Investments | The Company invests in investment securities, principally debt instruments of financial institutions and corporations with strong credit ratings. The following represents a summary of the estimated fair value of short-term investments at September 30, 2017 and December 31, 2016 (in thousands): At September 30, 2017 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 416 $ 43 $ — $ 459 Total $ 416 $ 43 $ — $ 459 At December 31, 2016 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Available-for-sale investment securities: Commercial paper Less than 1 $ 8,483 $ 1 $ (2 ) $ 8,482 Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 354 $ 26 $ (2 ) $ 378 Total $ 8,837 $ 27 $ (4 ) $ 8,860 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | Inventory consisted of the following at September 30, 2017 and December 31, 2016 (in thousands): September 30, December 31, 2017 2016 Raw materials $ 10,138 $ 9,375 Work in process 5,497 4,395 Finished goods 14,350 7,425 Total $ 29,985 $ 21,195 The increase in inventory at September 30, 2017 as compared to December 31, 2016 is primarily due to an increase in infusion set finished goods in connection with the commercial launch of the t:lock infusion set. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands): Fair Value Measurements at September 30, 2017 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (1) $ 16,527 $ 16,527 $ — $ — Mutual funds held for nonqualified deferred compensation plan participants (2) 459 459 — — Total assets $ 16,986 $ 16,986 $ — $ — Liabilities Deferred compensation (2) $ 459 $ 459 $ — $ — Total liabilities $ 459 $ 459 $ — $ — Fair Value Measurements at December 31, 2016 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (1) $ 39,941 $ 39,941 $ — $ — Commercial paper 8,482 — 8,482 — Mutual funds held for nonqualified deferred compensation plan participants (2) 378 378 — — Total assets $ 48,801 $ 40,319 $ 8,482 $ — Liabilities Deferred compensation (2) $ 378 $ 378 $ — $ — Total liabilities $ 378 $ 378 $ — $ — (1) Generally, cash equivalents include money market funds and investments with a maturity of three months or less from the date of purchase. This asset is included as a component of cash and cash equivalents on the balance sheet, of which $10.0 million is classified as restricted cash – long-term at September 30, 2017. (2) The deferred compensation plan is directed by the Company and structured as a Rabbi Trust for the benefit of certain executives and non-employee directors. The investment assets of the Rabbi Trust are valued using quoted market prices multiplied by the number of shares held in each trust account. The related deferred compensation liability represents the fair value of the investment assets . |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Shares of Common Stock Reserved for Future Issuance | The following shares of the Company’s common stock were reserved for future issuance at September 30, 2017 (in thousands): Shares underlying outstanding warrants 293 Shares underlying outstanding stock options 933 Shares authorized for future equity award grants 39 Shares authorized for issuance as ESPP awards — 1,265 |
Schedule of Assumptions Used in Black-Scholes Option-Pricing Model | The assumptions used in the Black-Scholes option-pricing model are as follows: Stock Option Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Weighted average grant date fair value (per share) $ 3.00 $ 35.00 $ 5.10 $ 37.80 Risk-free interest rate 2.0 % 1.3 % 1.9 % 1.4 % Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 % Expected volatility 60.3 % 56.1 % 60.0 % 55.5 % Expected term (in years) 6.1 6.1 6.1 6.1 ESPP Nine Months Ended September 30, 2017 (1) 2016 Weighted average grant date fair value (per share) N/A $ 26.90 Risk-free interest rate N/A 0.6 % Expected dividend yield N/A 0.0 % Expected volatility N/A 56.9 % Expected term (in years) N/A 1.3 (1) There were no grants made pursuant to the ESPP during the three and nine months ended September 30, 2017. |
Summary for Allocation of Stock-Based Compensation Expense | The following table summarizes the allocation of stock-based compensation expense (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Cost of sales $ 264 $ 267 $ 1,022 $ 776 Selling, general & administrative 1,961 2,320 8,423 6,992 Research and development 167 318 1,057 965 Total $ 2,392 $ 2,905 $ 10,502 $ 8,733 |
Organization and Basis of Pre22
Organization and Basis of Presentation - Additional Information (Detail) $ / shares in Units, $ in Thousands | Oct. 17, 2017USD ($)$ / sharesshares | Oct. 09, 2017shares | Sep. 30, 2017USD ($)shares | Mar. 31, 2017$ / sharesshares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)shares |
Organization And Basis Of Presentation [Line Items] | ||||||||
Operating losses and accumulated deficit | $ (466,207) | $ (466,207) | $ (404,580) | |||||
Net loss | (16,035) | $ (29,814) | (61,627) | $ (68,624) | ||||
Cash used from operations | (54,495) | $ (47,591) | ||||||
Cash and cash equivalents and short-term investments including restricted cash—long-term | 22,500 | 22,500 | ||||||
Restricted cash | $ 10,000 | $ 10,000 | ||||||
Reverse stock split of company's issued and outstanding shares of common stock description | 1-for-10 reverse stock split | |||||||
Number of authorized shares of common stock remains | shares | 100,000,000 | 100,000,000 | 100,000,000 | |||||
Secondary Public Offering [Member] | ||||||||
Organization And Basis Of Presentation [Line Items] | ||||||||
Shares offered for public offering | shares | 1,850,000 | |||||||
Shares offering price per share | $ / shares | $ 12.50 | |||||||
Subsequent Event [Member] | ||||||||
Organization And Basis Of Presentation [Line Items] | ||||||||
Reverse stock split of company's issued and outstanding shares of common stock description | 1-for-10 reverse stock split | |||||||
Reverse stock split, conversion ratio | 0.1 | |||||||
Number of authorized shares of common stock remains | shares | 100,000,000 | |||||||
Subsequent Event [Member] | Secondary Public Offering [Member] | ||||||||
Organization And Basis Of Presentation [Line Items] | ||||||||
Proceeds from issuance of common stock, gross | $ 16,200 | |||||||
Shares offered for public offering | shares | 4,630,000 | |||||||
Shares offering price per share | $ / shares | $ 3.50 | |||||||
Expected gross proceeds upon exercise of warrants | $ 16,200 | |||||||
Subsequent Event [Member] | Series A warrants [Member] | Secondary Public Offering [Member] | ||||||||
Organization And Basis Of Presentation [Line Items] | ||||||||
Warrants issue to purchase common stock | shares | 4,630,000 | |||||||
Warrants exercise price | $ / shares | $ 3.50 | |||||||
Public offering period | 5 years | |||||||
Subsequent Event [Member] | Series B warrants [Member] | Secondary Public Offering [Member] | ||||||||
Organization And Basis Of Presentation [Line Items] | ||||||||
Warrants issue to purchase common stock | shares | 4,630,000 | |||||||
Warrants exercise price | $ / shares | $ 3.50 | |||||||
Public offering period | 6 months | |||||||
Term Loan Agreement [Member] | ||||||||
Organization And Basis Of Presentation [Line Items] | ||||||||
Restricted cash | $ 10,000 | $ 10,000 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Restricted cash | $ 2,000,000 | |
Guarantee liabilities recognized as sales | $ 1,100,000 | |
Guarantee liabilities in other current liabilities | 0 | 1,200,000 |
Amount for upgradation requested but not yet fulfilled. | $ 200,000 | |
Offered period for sales return | 30 days | |
Allowance for product returns | $ 200,000 | 200,000 |
Warranty reserve | $ 4,750,000 | 5,690,000 |
Percentage of revenue recognition from contracts with customers | 99.00% | |
ASU 2016-09 [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Excess tax benefits for which benefit could not previously be recognized | 656,000 | |
Warranty reserves [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Warranty reserve | $ 4,800,000 | 5,700,000 |
Connect Hosting Service [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Deferred revenue | $ 1,800,000 | 1,600,000 |
Revenue recognition hosting period | 4 years | |
Tandem Pump [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Warranty period offered | 4 years | |
Slim cartridges and infusion sets [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Warranty period offered | 6 months | |
Trade-in rights reserve [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Deferred revenue | 3,200,000 | |
Term Loan Agreement [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Restricted cash | $ 10,000,000 | $ 2,000,000 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Summary of Reconciliation of Change in Product Warranty Liabilities (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Movement In Standard And Extended Product Warranty Increase Decrease Roll Forward | |
Beginning balance | $ 5,690 |
Provision for warranties issued during the period | 4,110 |
Settlements made during the period | (5,240) |
Increases in warranty estimates | 190 |
Ending balance | 4,750 |
Current portion | 2,080 |
Non-current portion | $ 2,670 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies - Schedule of Anti-Dilutive Securities (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 8 | 405 | 3 | 368 |
Common stock warrants [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 99 | 99 | ||
Common stock options [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 8 | 293 | 3 | 262 |
ESPP [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 13 | 7 |
Short-Term Investments - Summar
Short-Term Investments - Summary of Estimated Fair Value of Short-Term Investments (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2017 | |
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Short-term investments, Amortized Cost | $ 8,837 | $ 416 |
Short-term investments, Unrealized Gain | 27 | 43 |
Short-term investments, Unrealized Loss | (4) | |
Short-term investments, Estimated Fair Value | 8,860 | 459 |
Trading securities — mutual funds held for nonqualified deferred compensation plan participants [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Trading securities, Amortized Cost | 354 | 416 |
Trading securities, Unrealized Gain | 26 | 43 |
Trading securities, Unrealized Loss | (2) | |
Trading securities, Estimated Fair Value | 378 | $ 459 |
Commercial paper [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Available-for-sale investment securities, Amortized Cost | 8,483 | |
Available-for-sale investment securities, Unrealized Gain | 1 | |
Available-for-sale investment securities, Unrealized Loss | (2) | |
Available-for-sale investment securities, Estimated Fair Value | $ 8,482 | |
Commercial paper [Member] | Maximum [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Available-for-sale investment securities, Maturity (in years) | 1 year |
Inventory - Summary of Inventor
Inventory - Summary of Inventory (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 10,138 | $ 9,375 |
Work in process | 5,497 | 4,395 |
Finished goods | 14,350 | 7,425 |
Total | $ 29,985 | $ 21,195 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | $ 16,986 | $ 48,801 |
Total liabilities | 459 | 378 |
Cash equivalents [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 16,527 | 39,941 |
Commercial paper [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 8,482 | |
Mutual funds held for nonqualified deferred compensation plan participants [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 459 | 378 |
Deferred compensation [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 459 | 378 |
Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 16,986 | 40,319 |
Total liabilities | 459 | 378 |
Level 1 [Member] | Cash equivalents [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 16,527 | 39,941 |
Level 1 [Member] | Mutual funds held for nonqualified deferred compensation plan participants [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 459 | 378 |
Level 1 [Member] | Deferred compensation [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | $ 459 | 378 |
Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 8,482 | |
Level 2 [Member] | Commercial paper [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | $ 8,482 |
Fair Value Measurements - Sch29
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Restricted cash—long-term | $ 10,000 |
Maximum [Member] | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Cash equivalents maturity term | 3 months |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | Mar. 07, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Transfer between level 1 and level 2 assets | $ 0 | ||
Guarantee liabilities in other current liabilities | $ 0 | $ 1,200,000 | |
Term Loan Agreement [Member] | Capital Royalty Warrant [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Warrants life | 10 years | ||
Warrants issue to purchase common stock | 193,788 | ||
Warrants exercise price | $ 23.50 | ||
Capital royalty warrant value | $ 3,300,000 |
Term Loan Agreement - Additiona
Term Loan Agreement - Additional Information (Detail) - USD ($) | Mar. 07, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | Oct. 01, 2015 | Sep. 30, 2015 |
Debt Instrument [Line Items] | |||||||
Interest rate | 11.50% | ||||||
Interest payable as cash | 9.50% | ||||||
Compounded interest payable | 2.00% | ||||||
Additional amount borrowed | $ 1,236,000 | $ 675,000 | $ 2,300,000 | ||||
Minimum annual revenues attainable in 2017 | 80,000,000 | 80,000,000 | |||||
Minimum annual revenues attainable after 2017 | 95,000,000 | 95,000,000 | |||||
Term Loan Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Loan outstanding | $ 82,300,000 | $ 82,300,000 | $ 81,100,000 | ||||
Interest rate | 11.50% | 11.50% | |||||
Interest payable as cash | 9.50% | 9.50% | |||||
Compounded interest payable | 2.00% | 2.00% | |||||
Interest-only payments description | Under the Term Loan Agreement, interest is payable at the Company’s option, (i) in cash at a rate of 11.5% per annum, or (ii) at a rate of 9.5% of the 11.5% per annum in cash and 2.0% of the 11.5% per annum (the “PIK Loan”) to be added to the principal of the loan and subject to accruing interest. Interest-only payments are due quarterly on March 31, June 30, September 30 and December 31 of each year of the interest-only payment period, which ends on December 31, 2019. | ||||||
Maturity date for interest-only payment | Dec. 31, 2019 | ||||||
Maturity date for principal balance | Mar. 31, 2020 | ||||||
Percentage of financing fee | 5.00% | ||||||
Restricted cash balance | $ 10,000,000 | 2,000,000 | |||||
Third Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of financing fee | 3.00% | ||||||
Line of credit facility amount borrowed | $ 50,000,000 | ||||||
Third Amendment [Member] | Other Long Term Liabilities And As Contra-Debt In Notes Payable-Long Term [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Accrued back end financing fee | $ 4,100,000 | $ 4,100,000 | $ 1,500,000 | ||||
Fourth Amendment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Equity finance completion last date | Jan. 15, 2018 | ||||||
Present value of the future cash flows | 10.00% | 10.00% | |||||
Fourth Amendment [Member] | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Gross proceeds from sale of equity securities on event of default occurred due to going concern qualification | $ 30,000,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jul. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Gross proceeds from secondary public offering | $ 23,100,000 | |||||||
Common stock shares issued | 24,408 | 14,897 | ||||||
Previously unrecognized compensation cost fully expensed | $ 2,392,000 | $ 2,905,000 | $ 10,502,000 | $ 8,733,000 | ||||
Total stock-based compensation expense capitalized as part of cost of inventory | $ 300,000 | $ 200,000 | ||||||
Secondary Public Offering [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares offered for public offering | 1,850,000 | |||||||
Shares offering price per share | $ 12.50 | |||||||
At The Market (ATM) Program [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Gross proceeds from secondary public offering | $ 4,300,000 | |||||||
At The Market (ATM) Program [Member] | Maximum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Proceeds from issuance of common stock, gross | $ 15,000,000 | |||||||
At The Market (ATM) Program [Member] | Common Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares offered for public offering | 464,108 | |||||||
At The Market (ATM) Program [Member] | Common Stock [Member] | Maximum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares offering price per share | $ 10.54 | $ 10.54 | ||||||
At The Market (ATM) Program [Member] | Common Stock [Member] | Minimum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares offering price per share | $ 5.64 | $ 5.64 | ||||||
ESPP [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Purchase of common stock under ESPP | 38,929 | 69,502 | ||||||
Offering Period | 2 years | |||||||
Purchase Period | four six-month | |||||||
Previously unrecognized compensation cost fully expensed | $ 2,400,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Shares of Common Stock Reserved for Future Issuance (Detail) shares in Thousands | Sep. 30, 2017shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 1,265 |
Shares underlying outstanding warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 293 |
Shares underlying outstanding stock options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 933 |
Shares authorized for future equity award grants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 39 |
Stockholders' Equity - Schedu34
Stockholders' Equity - Schedule of Assumptions Used in Black-Scholes Option-Pricing Model (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value (per share) | $ 3 | $ 35 | $ 5.10 | $ 37.80 |
Risk-free interest rate | 2.00% | 1.30% | 1.90% | 1.40% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility | 60.30% | 56.10% | 60.00% | 55.50% |
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days |
ESPP [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value (per share) | $ 26.90 | |||
Risk-free interest rate | 0.60% | |||
Expected dividend yield | 0.00% | |||
Expected volatility | 56.90% | |||
Expected term (in years) | 1 year 3 months 19 days |
Stockholders' Equity - Schedu35
Stockholders' Equity - Schedule of Assumptions Used in Black-Scholes Option-Pricing Model (Parenthetical) (Detail) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
ESPP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants made during period | 0 | 0 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary for Allocation of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost | $ 2,392 | $ 2,905 | $ 10,502 | $ 8,733 |
Cost of sales [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost | 264 | 267 | 1,022 | 776 |
Selling, general & administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost | 1,961 | 2,320 | 8,423 | 6,992 |
Research and development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost | $ 167 | $ 318 | $ 1,057 | $ 965 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - LegalMatter | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Number of legal proceedings, regulatory encounters or other matters | 0 | 0 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) $ / shares in Units, $ in Millions | Oct. 17, 2017USD ($)$ / sharesshares | Oct. 09, 2017shares | Mar. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017shares | Dec. 31, 2016shares |
Subsequent Event [Line Items] | |||||
Reverse stock split of company's issued and outstanding shares of common stock description | 1-for-10 reverse stock split | ||||
Number of authorized shares of common stock remains | 100,000,000 | 100,000,000 | |||
Gross proceeds from secondary public offering | $ | $ 23.1 | ||||
Secondary Public Offering [Member] | |||||
Subsequent Event [Line Items] | |||||
Shares offered for public offering | 1,850,000 | ||||
Shares offering price per share | $ / shares | $ 12.50 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Reverse stock split of company's issued and outstanding shares of common stock description | 1-for-10 reverse stock split | ||||
Reverse stock split, conversion ratio | 0.1 | ||||
Number of authorized shares of common stock remains | 100,000,000 | ||||
Gross proceeds from secondary public offering | $ | $ 16.2 | ||||
Subsequent Event [Member] | Secondary Public Offering [Member] | |||||
Subsequent Event [Line Items] | |||||
Shares offered for public offering | 4,630,000 | ||||
Shares offering price per share | $ / shares | $ 3.50 | ||||
Public offering issuance date | Oct. 17, 2017 | ||||
Subsequent Event [Member] | Series A warrants [Member] | Secondary Public Offering [Member] | |||||
Subsequent Event [Line Items] | |||||
Warrants issue to purchase common stock | 4,630,000 | ||||
Warrants exercise price | $ / shares | $ 3.50 | ||||
Public offering period | 5 years | ||||
Subsequent Event [Member] | Series B warrants [Member] | Secondary Public Offering [Member] | |||||
Subsequent Event [Line Items] | |||||
Warrants issue to purchase common stock | 4,630,000 | ||||
Warrants exercise price | $ / shares | $ 3.50 | ||||
Public offering period | 6 months |